After a week of decline, international oil began to rebound due to the difficulty of some OPEC member countries in increasing production as much as expected, and the market’s concerns about supply uncertainty. Affected by two main factors, oil prices began to rebound. Subsequently, the G7 meeting planned to impose more sanctions on Russia, and supply instability in Libya continued. Crude oil continued to rise, regaining $110.
While crude oil is rising, naphtha continues to be stronger, forming support for PX and consolidating on the stronger side. As the price of PTA fell rapidly, some buying orders appeared, and macro pessimism gradually released, and it began to bottom out. The cost side of ethylene glycol also received support and began to rebound slightly.
Seeing this, textile people can’t help but wonder, will the price of polyester filament go back again? The answer given by the editor is to follow the strengthening of crude oil prices. The polyester factory has issued a notice: Polyester filament will continue to be sold at a fixed price for half a day in the morning on the 28th at yesterday’s price, and the discount in the afternoon will be reduced by 100! There will no longer be low-price promotions before the end of the month!
Sure enough, after a notice was issued in the morning, some companies made a second price adjustment in the afternoon, and some factories had room for an increase of 50-100 yuan/ton.
Then it is obvious that even if polyester filament yarn is not supported by the cost end, at least the downward channel is closed and the discount is no longer available. However, it is now the end of the month and there is a certain demand for replenishment in the market. According to the recent purchasing habits of downstream weaving factories, many factories usually carry out a centralized replenishment during the promotion at the end of the month. It seems that they will miss the opportunity to purchase at discounts this month.
Judging from the current situation, the factors affecting the price of polyester yarn are nothing more than three major aspects: cost, demand and supply.
01
Polyester yarn supported by oil prices
From a cost perspective, crude oil is the most important factor supporting its price rise. The limited idle production capacity of OPEC+ members is difficult to alleviate the tight supply situation, which has supported oil prices. But at the same time, as the impact of inflation raises concerns about economic recession, demand for crude oil is gradually weakening. Under the simultaneous influence of the two, I am afraid that it will be difficult for oil prices to fall if they are supported, but it will be difficult to break through the limit and rise sharply. In the future, if crude oil continues to fluctuate, it will be difficult for polyester filament to return to low prices.
02
Polyester will be dragged down by demand
In terms of demand, the downstream weaving market is currently in the traditional off-season, and the overall terminal demand in the market is weak. It is mainly based on small batches, proofing, and price seeking, and new orders are limited. A small number of foreign trade orders for autumn and winter just need to be placed, and the market atmosphere for receiving orders is not good. As the off-season deepens, most companies report that it will continue to be more difficult to place new orders. According to research, some weaving companies are currently reducing production and operating hours, and a few companies have even stopped production.
At present, the operating rate of major clusters in Jiangsu and Zhejiang is low. The operating rate of Shengze water-jet looms is now over 60%; the operating rate of warp knitting machines is around 40%; and the operating rate of circular knitting machines has dropped to over 30%. The overall operating rate is only over 40%, and manufacturers’ enthusiasm for production has been significantly frustrated. Then, as the temperature rises, factories may have plans to reduce production again. It is obvious then that the demand for polyester will also weaken further. In fact, it can be seen from the recent production and sales that production and sales are very sluggish most of the time. It can be judged from this that the price of polyester yarn will be dragged down by demand in the later period.
03
It is still difficult to remove polyester yarn from warehouses
In terms of supply, as of now, the average inventory of domestic polyester filament is more than one month. The average polyester load this week was 84.8%, an increase of 0.3% from last week. In early April, polyester factories started a plan to reduce production and protect prices, but now the load is slowly picking up, and the effect of polyester destocking is average. In addition, polyester factories are currently in a state of serious loss, and polyester yarn profits have not been significantly improved. Even DTY products, which had been profitable in the early stage, are now starting to lose money. In order not to continue to fall into the quagmire of losses, polyester factories have a stronger mentality of protecting prices. Judging from previous years, July-August is the traditional low season for demand. It cannot be ruled out that polyester factories will reduce production again to protect prices, so polyester yarns still have certain support.
At present, the shipment of conventional products in the weaving market is declining, and the shipment of differentiated goods is also showing a downward trend compared with previous years. The current market lacks boost from hot-selling fabrics, and foreign trade orders are greatly affected by the return of orders to Southeast Asia. Under high costs and low demand, productivity still remains low. It is difficult to make a breakthrough in the demand for textiles and clothing in the third quarter. In the future, the market trend of polyester filament needs to continue to pay attention to the three aspects of cost, demand and supply.
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